The hot rolled coil market in the Middle East area is still sluggish and therefore, the Japanese mills will have no part to play. At present, it is said that offering price of hot coils of Russian make is USD 720 to USD 725 C&F, and that of Ukrainian make is up USD 10 to USD 715 C&F. It is reported that Russia obtained hot coils orders of 20,000 tonnes to 30,000 tonnes at below USD 650 FOB in early May.
The main reason why the hot coil market in the Middle East area is slow is under volatile political climate. And also, it is because offering prices of Russia and Ukraine are too cheap. The blast furnace mills of both countries have own raw materials of which cost structure is different from that of Japan and Korea, and thus the mills seem to be able to export hot coils at cheaper prices.
In the Middle East area, as Ramadan starts in August, the drop off season in demand will come in summer. So, it is concerned that the Russian and the like may move in the Asian market with cheaper hot coils. However there is no such movement for the time being.
It is reported that Indian hot coils are distributed in small quantities in the Southeast Asian market. It is the background that production capacity has been enhanced by the Indian mills of which price level is said to be USD 730 to USD 750 C&F. This level is similar to that of China. However, it is believed that such price of China comes from Chinese distributors and offers from the mills stopped in April and May shipment. Therefore, new offering prices are expected to come out from the Chinese mills soon, and attention will be paid to see whether they will show an attitude toward even slight increase in price.
The hot coil markets are sluggish not only in Middle East but also in Southeast Asia and East Asia. China Steel Corp. of Taiwan will announce the domestic prices for July and August shipment in a day or so. It is the first offer for next quarter and price of hot coils is expected to be decreased which will possibly add further turmoil in the market.
(Sourced from the TEX Report)
